Monday, May 01, 2006

Eastern Europe Moves West?

by Edward Hugh

Today, May 1, Spain, Portugal and Finland join Britain, Ireland and Sweden in ending all restrictions on movement of workers from new EU member states.In some ways, as this AP article suggests, this is a historic moment, since for many young peoplethe gradual labor market liberalization has meant opportunities their parents' generation could hardly have imagined.:

"Some of the workers benefiting from the lifting of labor restrictions are so young they lose sight of the historic change this marks for Poles, Lithuanians, Czechs and the others who, until 16 years ago, were trapped behind the Iron Curtain and banned from traveling freely to the West".

The movement started in earnest around 2 years ago:

Since 2004, the new EU members — eight eastern European countries along with Malta and Cyprus — have seen their citizens board budget flights to Britain, Ireland and Sweden in large numbers to seek jobs.

No country has sent more workers than Poland, whose 38 million people make it the largest EU newcomer by far, and whose jobless rate of 18 percent — the highest in the EU — pushes many, especially the young, to seek a better life elsewhere. About 200,000 Poles have registered to work in Britain since 2004, with some 100,000 in Ireland and 8,000 in Sweden.

But even more — up to 1 million Poles — are believed to be working now throughout Europe, sometimes illegally in countries like Germany that haven't formally opened their labor markets, said Krystyna Iglicka, a migration expert with the Center of International Relations in Warsaw.

But these workers, which represent a huge 'bonus' for the receiving countries, also represent a loss for the ones who see them depart, since the ageing and low-fertility issues are, if anything, even stronger in Eastern than in Western Europe:

"In this situation, you lose the most active elements because the less exciting people stay at home and drink," said Krzysztof Bobinski, an analyst at Unia & Polska, a pro-EU organization. "I wouldn't call it a 'brain drain' because that term makes me think of rocket scientists. But it is a hemorrhaging and I don't think it's going to do Poland any good in the long run."

Emigration is also depriving Poland and the neighboring Baltics of much-needed labor, threatening to slow some of the EU's fastest-growing economies. Estonia, Latvia and Lithuania, which are home to just 7.2 million residents, estimate the numbers that have left are in the tens of thousands — possibly more.

Poland has already noticed a dangerous shortage of anesthesiologists. And the western Polish city of Wroclaw is so concerned departures could cause a shortage of skilled workers in coming years — and dampen a local investment boom — that it plans an advertising campaign in Britain this September letting Poles know attractive jobs await them back home.

Baltic construction companies have been particularly hard hit, and several have begun looking east to Russia and Belarus for workers.

Lithuanian Rimantas Bublys said his company, Vigysta, had to cast aside any and all standards for employee behavior just to keep its projects moving forward.

"Two years ago we used to fire our workers who were lazy or had drinking problems," Byblys said. "Today we cannot afford to fire anyone because there are no replacements available. Our business would simply stop."

You only have to look at China, and see how huge labour surpluses have now, in some areas, been rapidly converted into labour shortages to see what might happen, and how today's boom could so easily become the crisis of tomorrow.